| BULGARIA PROPERTY MARKET 2009 REVIEW |
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| Thursday, 14 January 2010 | |
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It will come as no surprise to readers to find that Bulgaria is among the countries that marked the sharpest fall in residential prices in the third quarter of 2009, an international survey, issued yesterday, shows. Losers on an annual basis include Bulgaria down 28%, Russia, down 9.10%, the US down 9.4% and Thailand down 18.4%, according to the latest Global House Price Index from Knight Frank.
Residential property values increased in 68% of countries reporting price changes, but house prices are still lower than 12 months ago in 57% of the locations with Israel the top year on year performer with a 13.7% price increase from the same time last year. During the third quarter property prices in Singapore rose 13.7% compared with the previous three months and Dubai posted a modest positive growth (1.2%) but has seen prices drop in the last 12 months by 47%. "House prices are now rising in a clear majority of locations around the world with almost 70% of the locations reporting growth in the third quarter of 2009. This compares with under 50% during the second three months of the year,’ said Liam Bailey, head of residential research at Knight Frank. "There is still, however, a clear polarization from the top to the bottom of the table. Israel remains the best performer on an annual basis and is the only country to have recorded double digit growth. Spain, Denmark and Ireland have yet to record their first quarter of growth since the credit crunch and analysts point out that an oversupply of stock is holding back prices. "This contrasts with the UK, which, despite being hit extremely hard initially, is staging a strong comeback as a shortage of houses for sale is contributing to rising values with demand outstripping supply,’ explained Bailey. Meanwhile, Bulgaria recorded a 2% drop in the number of new residential buildings constructed. A total of 685 new residential buildings were completed in the third quarter of 2009 which is a 2% drop compared to the same period of 2008. The decline compared to the second quarter of 2009 is 0.9%, according to preliminary data of the National Statistical Institute released at the beginning of December. The District of Varna saw the greatest number of newly completed residential buildings in July-September 2009 – 163. At the opposite end, no new buildings were completed in the southwest region of Kyustendil. However, construction of luxury properties in Bulgaria seemed to be unaffected by the economic crisis. So say the entrepreneurs and experts who participated in the “High Class in Construction” exhibition which took place in Sofia at the end of November. Indeed, experts believe that the economic crisis has led to a greater focus precisely on high-quality properties. According to the Chief Architect of Sofia, Petar Dikov, Bulgaria has a very good potential for a dynamic market of luxury properties. The participants in the expo believe that the crisis has hit mostly the low-quality construction projects in the country, and that most investors actually have made mistakes by seeking quick returns on property investments without accounting for good quality. Staying with high-end properties, 27 Bulgarian Hotels are listed For Sale in Financial Times as of 27th December. The highest sales price is USD 36 M for the four-star “Penelope Palace” near the Black Sea resort of Pomorie. The expensive apartment-type hotel is not even fully built and it is supposed to be completed in June 2010. The second priciest hotel is listed for BGN 35. M and is also on the Black Sea Coast in the nearby “Sunny Beach” resort. This is another four-star establishment, but it has been open for 10 years now and has contracts with major tour operators such as Apollo and Neckerman (Thomas Cook chain). The winter resort hotels in Bansko, Borovets and Pamporovo are cheaper. The top sales price here is USD 17 M. In addition, there are several business hotels for sale in Sofia with the top price of BGN 21 M. |
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